Town of Seekonk

Massachusetts Department of Revenue Division of Local Services

Henry Dormitzer, Commissioner Robert G. Nunes, Deputy Commissioner & Director of Municipal Affairs

Town of Seekonk

Financial Management Review

Division of Local Services/Technical Assistance Section

October 2007

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Massachusetts Department of Revenue Division of Local Services

Henry Dormitzer, Commissioner Robert G. Nunes, Deputy Commissioner & Director of Municipal Affairs

Introduction

At the request of the board of selectmen, the Department of Revenue's Division of Local Services (DLS) has completed a financial management review of the Town of Seekonk.

We have based our findings and recommendations on site visits by a team consisting of staff from the Division's Technical Assistance Section (TA), Bureau of Accounts (BOA) and Bureau of Local Assessment (BLA). During these visits and by telephone, the team interviewed and received information from the members of the board of selectmen, the finance committee chair, the school committee chair, the capital planning committee chair, the town administrator, finance director, treasurer/collector, town assessor, as well as other staff members, as available, in each office.

DLS staff examined such documents as the tax recapitulation sheet, warrants, annual budgets, balance sheets, cash reconciliation reports, statements of indebtedness, the town charter and by-laws as well as other assorted financial records. Other documents reviewed included July 2005 ratings reports from Moody's Investors Services and Standard & Poor's Ratings Services, and the independent audits for FY2005 and FY2006 completed by R.E. Brown & Company.

In reviewing the town's financial management practices, we have focused on: (1) town government structure in the context of the duties and responsibilities of financial officers; (2) the town's budget, warrant and capital planning processes; (3) the degree of coordination and communication that exists between and among boards, officials and staff involved in the financial management function; and (4) the general efficiency of financial operations measured by the town's success in maximizing resources and minimizing costs.

We encourage the members of the board and others, when formulating overall strategies for improving the town's financial management, to consider the observations, analyses and recommendations contained in this report. These are recommendations only and can be implemented, at the town's option, provided there is sufficient cooperation among the various town boards, committees and officials.

DIVISION OF LOCAL SERVICES, POST OFFICE BOX 9569, BOSTON, MA 02114-9569 TEL: 617-626-2300

DIVISION OF LOCAL SERVICES

FINANCIAL MANAGEMENT REVIEW

Overview

The Division of Local Services (DLS) typically conducts financial management reviews in instances where help is sought to resolve a particular problem, or where an overall evaluation of government operations is desired. In Seekonk, the board of selectmen made a formal request that DLS review the town's fiscal practices in search of ways to improve financial practices and procedures.

Seekonk, with a population of 13,648 (2006 estimate), is located on the western edge of Bristol County in southeastern Massachusetts. The town is bordered to the north by the City of Attleboro, to the east by the Town of Rehoboth, to the south by the Town of Swansea, and to the west by the City of East Providence, Rhode Island. Primary transportation amenities include access to I-195; Route 6, which is a major commercial corridor; and Route 44, which runs eastand-west, bisecting the town.

In May, Seekonk Town Meeting appropriated a $38.3 million general fund operating budget for FY2008. Historically, Seekonk's budget has been comparable in size to those of communities with similar populations. The residential tax rate for FY2007 was $8.92 per $1,000 of assessed value. The average single family home was assessed at $360,426 with a corresponding tax bill of $3,215, which falls below the state-wide average of $3,962. The town's commercial and industrial property is taxed on a separate, or split, rate ($19.64 per $1,000 in FY2007) compared to residential property.

The legal framework for financial management in Seekonk is established in the town's home rule charter and in relevant town bylaws. The selectmen collectively act as the head of the executive branch of government and appoint a town administrator to manage day-to-day operations. The finance director, who also functions as the town accountant, is appointed by the board of selectmen at the recommendation of the town administrator. The treasurer/collector is similarly appointed. Operations in the assessing office are overseen by the town assessing officer who is appointed by a part-time, elected board of assessors. There is a finance committee which annually reviews the budget and recommends action to town meeting. More recently, a capital improvement committee was appointed jointly by the selectmen and the town moderator to prepare and make recommendations on a five-year capital plan.

Our review found that individual departments operate within the dictates of municipal finance law and, on average, financial staff perform their jobs well and complete tasks on a timely basis with careful attention to detail. However, during our review several issues surfaced relating to broad matters of fiscal management and policy.

The first issue is the tenure of board/committee members and finance department heads, most of whom are new to their positions with the town as illustrated below.

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DIVISION OF LOCAL SERVICES

FINANCIAL MANAGEMENT REVIEW

Board of Selectmen Finance Committee Capital Planning Town Administrator Finance Director Treasurer/Collector Assessor

Four of the five members have tenures of three years or less Four of the seven members have tenures of less than two years Established as a standing committee in November 2006 One year (interim); four administrators in six years Two years Four years Six months

The next town administrator in Seekonk will be the fifth person to hold the office in the last seven years.

Taken in isolation, length of service would not be considered compelling, but viewed collectively, it is indicative of substantial turnover. Notwithstanding individual skills and capabilities, with persistent turnover, institutional knowledge is lacking and the benefits of working together as a cohesive team are difficult to fully realize. It can also make for difficulty in recruiting quality personnel for other positions in government, including the town administrator's position, itself. Furthermore, turnover in departmental and board/committee leadership has already depleted the historical knowledge base at town hall. While the town has been fortunate to fill positions in the finance-related offices with skilled and experienced professionals, government as a whole has lacked managerial longevity.

Directly related to the issue of tenure is the upcoming search and pending appointment of a new town administrator. In an environment where turnover has occurred and tenures are short, the decision-makers should carefully consider the skill-set required and expectations for the position. However, it is unclear to us what role the selectmen seek to entrust to the next town administrator.

In speaking with town officials, opinions about the most important characteristics to seek were wide-ranging. Because Seekonk has struggled to attract and retain individuals to the administrator's position, it has caused some to question the present structure of government. However, from our perspective, a suitable structure is already in place. Only appropriate roles and expectations for the various officials need to be clarified. Once well defined roles have been established in town government, we expect to see improvement both in citizens' perception of government and the capacity of town officials to plan for the future. Selecting a town administrator who can facilitate this cultural change is crucial to future success.

The second issue of concern is late decision-making on the town's operating budget. The bulk of deliberation appears to take place between March and the spring town meeting in May. Limited financial analysis or policy-making is occurring in the fall and winter which should be the front-end of the annual budget process. Normally, early agreements on available resources and spending strategies establish a framework for choices affecting appropriations proposed at town meeting.

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DIVISION OF LOCAL SERVICES

FINANCIAL MANAGEMENT REVIEW

Ideally, the process should begin in the fall with revenue projections for the upcoming budget year. Presentation of a multi-year financial forecast is also important in order to understand the ongoing relationship between future revenue sources, the likely use of funds and, particularly, the way program costs in the current year affect the community's fiscal picture 2-3 years out. Furthermore, budget deliberations should be completed far enough in advance to allow the meaningful communication of recommendations to town meeting.

Originally, as a response to the need for communication on contract negotiations and other ad hoc issues, so-called "tri-board" meetings were initiated. The tri-board first consisted of the selectmen, school committee and finance committee, but now includes the newly formed capital improvement committee. The "quad-board" offers a platform for positive and meaningful communication that should be continued. Recommendations within this report offer ways to further mobilize the quad-board as part of the budget process.

A third area of focus is the potential to improve or streamline procedures in various finance-related departments. Many procedures are currently manual. Some internal controls are redundant. Still other cumbersome processes could be streamlined through the use of technology. However, opportunities for such improvements exist on an issue-by-issue basis and do not represent a unifying thread that runs through one office or another. Therefore, our recommendations are presented as a series of specific enhancements, as opposed to a comprehensive restructuring of any particular function or department.

Conclusion ? What one could say about financial management in Seekonk could also be said of most communities in Massachusetts ? that while day-to-day operations are generally sound, more focus is needed on long-term planning. The town has brought on new financial staff and town boards/committees have also seen turnover in recent years. Such turnover has created short-run barriers to financial planning, but has also fostered creative and thoughtful changes to town government. After meeting with board/committee members and staff, we see no reason why confusion about roles and responsibilities should persist once stability and sound processes have taken hold. With the pending appointment of a permanent town administrator, the personnel components are nearly in place for government to chart a better course for the future. Our report is designed to provide tools and frameworks that will help board/committee members and staff moving forward.

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